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Federal officials want to hear more from the public about what broker-dealers ought to tell purchasers of financial services products.[@@]

The U.S. Securities and Exchange Commission is reopening the public comment period for a draft of “point of sale disclosure” and confirmation notice rules that was published in January 2004.

The proposed rules would spell out cost and conflict-of-interest disclosure requirements for the sale of variable annuities and variable life policies as well as investments in mutual funds and 529 college savings plans.

Investors, producers, trade groups and others flooded the SEC with comments during the first comment period.

“We received over 1,000 separate comments on the proposed rules and rule amendments, as well as over 4,000 comments from individuals and entities using a variety of standard letter types,” according to a notice by Margaret McFarland, an SEC deputy secretary, that appeared Friday in the Federal Register.

McFarland asks members of the public to discuss dozens of questions that affect disclosures for all types of affected securities.

She also includes 2 major sections that deal specifically with variable annuities and variable life policies. One section asks for critiques of a proposed variable insurance product point-of-sale disclosure form, and another asks for critqiues of a proposed variable insurance product sales confirmation notice.

McFarland also sprinkles references to variable insurance products throughout the rest of the comment period notice. She asks, for example, whether broker-dealers should have to offer cost and conflict-of-interest disclosures for the investment products on variable insurance product investment menus.

In a section about disclosure of revenue-sharing arrangements, McFarland asks, “Should payments to an issuing insurance company from funds underlying variable insurance products be included? What conflicts do these payments pose?”

Allison Bell

Allison Bell, ThinkAdvisor's insurance editor, previously was LifeHealthPro's health insurance editor. She has a bachelor's degree in economics from Washington University in St. Louis and a master's degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached at abell@alm.com or on Twitter at @Think_Allison.

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